Japan's largest industrial union said the average wage increase offered by 231 firms to employees was the largest since 2013. This announcement was made after Japan's major manufacturers agreed yesterday to fully meet the demands of trade unions for higher wages at the annual wage negotiations.
UA Zensen, representing 2,237 unions and 1.8 million workers, announced a weighted average pay increase of 5.9% for full-time workers and 6.5% for part-time workers. UA Zensen represents workers in the service, textiles, distribution and other sectors as well as part-time employees, making it Japan's largest sector-to-sector union.
Strong wage growth is expected to lead to sustained inflation, which is a prerequisite for ending negative interest rates, while increasing the likelihood that the Bank of Japan may tighten monetary policy as early as the March meeting.